Build-To-Rent scheme seeking bids from property developers to help bring about the fastest rate of affordable residential property construction for two decades
UK Government Housing Minister, Mark Prisk, last week announced a second round of funding for the construction of new rental properties and the government are seeking fresh bids for a share of at least £400 Million (GBP) to build new properties specifically for the private rental sector (PRS).
The funding is part of the flagship £1 Billion (GBP) Build-To-Rent fund, which offers support for property developers and property investors who want to get into the private rental sector for the first time.
Mr Prisk said the new Build-To-Rent scheme would encourage investment in the UK’s private rental market and offer prospective tenants a greater choice of rental property. The scheme is intended to run alongside up to £10 Billion (GBP) in government housing guarantees.
One Build-To-Rent pilot scheme has already been given the green light, with work on the Centenary Quay development in Southampton already started with hundreds of new properties being built specifically for rental purposes.
Mr Prisk explained that the government Build-To-Rent initiative intends to offer more choice and flexibility to private rented sector tenants, and the best bids for the Build-To-Rent fund should ideally support longer term tenancies as part of the mix of accommodation being provided under the scheme.
Mr Prisk said “The housing market is turning the corner, with starts up a third compared to last year, and over 25,000 households helped into home ownership since 2010. But I want to go further, which is why I’m inviting bids for a share of up to half a billion pounds to help build a bigger, better private rented sector. This funding, combined with up to £10 Billion (GBP) in our housing guarantees schemes, will help build on successes like Centenary Quay in Southampton to offer greater choice and quality for tenants across the country”.
The Build-To-Rent fund is one of a number of government backed incentives designed to get the UK building to compensate for the shortfall in the current housing market.
So far the government measures have resulted in the building of 334,000 new residential properties in the UK over the past three years, putting the supply of new housing at its highest level since 2008, with more funding expected to help bring about the fastest rate of affordable residential property construction for two decades.
To date, over 25,000 households have been helped into home ownership through a range of schemes, including Help-To-Buy, NewBuy and the reinvigorated Right-To-Buy.
Boris Johnson, Mayor of London has said that the city needs tens of thousands of new residential properties with around a quarter of Londoners living in private rented accommodation. He said: “By releasing land and working with institutional investors we are working hard to accelerate delivery in the purpose built private rented sector. I welcome this fund which will not only provide more homes for working Londoners, but also deliver much needed construction jobs and will underpin this city’s future economic growth.”
The UK PRS has a key role to play in increasing the supply of new residential properties, according to the Chief Executive of the Homes and Communities Agency (HCA), Andy Rose, who said “There was strong appetite the first time round and we are looking forward to seeing an even higher level of interest and quality of proposition this time.”
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